The RU Partnership has two partners, Renee and Uri. Each partner's basis in his or her partnership interest is $16,000 before any distribution. The partnership distributes $26,000 cash to Renee and $6,000 cash to Uri.Read the requirements.Requirement a. Assuming a current distribution, determine for each partner (1) gain or loss recognized and (2) basis in the partnership interest after the distribution. (Complete all input fields. Enter a $0 for any zero balances. Enter a loss with aminus sign or parentheses.)ReneeUri(1) Gain (loss) recognized(2) Basis in the partnership interest after the distributionRequirementsa. Assuming a current distribution, determine for each partner (1) gain or lossrecognized and (2) basis in the partnership interest after the distribution.b. Assuming a liquidating distribution, determine each partner's gain or lossrecognized.

Liquation of a partnership means that the closing the business of partnership or in other words…

Answered: The RU Partnership has two partners,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Item Nos. 11 and 12 are based on the following information: The partnership contract of partners L and M provides that L, the managing partner is allowed a bonus of 20% of the profit after taxes. The partnership is subject to an income tax rate of 35% of the profit. During 200C, the partnership earned profit before taxes of P 113,000. 11. If the bonus is based on the profit after taxes but before bonus, how much is the bonus of L? а. Р 13,000. P 14,500. С. b. P 13,250. d. P 14,690.
Xavier and Yolonda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%, salary allowances of $27,000 and $18,000 respectively, and the remainder equally. How much of the net income of $40,000 is allocated to Xavier? 21. a. $20,000 b. $22,000 c. $32,000 d. $0 Moderate OBJ: LO: 12-02 DIF: PTS: 1 ANS: B KEY: Bloom's: Application NAT: BUSPROG: Analytic
In each of the following independent liquidating distributions in which the partnership also liquidates determine the amount and character of any gain or loss to be recognized by each partner and the basis of each asset (other than cash) received. In each case, assume that distributions of hot assets are proportionate to the partners. Be sure to explain your rationale. c. Neil has a partnership basis of $100,000 and receives $40,000 of cash, inventory with a basis to the partnership of $30,000, and a capital asset with a partner- ship basis of $20,000. The inventory and capital asset have fair market values of $20,000 and $30,000, respectively. d. Oscar has a partnership basis of $40,000 and receives a distribution of $10,000 of cash and an account receivable with a basis of $0 to the partnership (value is $15,000).
Fill in the blnnks: Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes P7500 cash and merchandise invetory with a market value of P1500. a. Tim, Capital will be credited in the amount of b. Michelle's investment should be c. After accounting for the total investments of Tim and Michelle, the total assets of the partnership amounts to
Partners B1 and B2 share income in a 2:1 ratio, respectively. Each partner receives an annualsalary allowance of P72,000. If the salaries are recorded in the accounts of the partnership as anexpense rather than treated as an allocation of profit, the total amount allocated to each partner forsalaries and profit would be a. unchanged for both B1 and B2b. less for both B1 and B2c. more for B1 and less for B2d. more for B2 and less for B1d. more for B2 and less for B1
(Cash and Non-cash Contributions) Give the entry to record Partner Luffy into the partnership under each of the independent assumptions: a. Cash of P400.000b. Accounts receivable of P500,000 with an allowance for uncollectible accounts of 150,000. c. Inventories that cost P300,000 using the moving average method accepted by the partnership at its FIFO value of80% of average cost. d. Equipment that costs P900,000 with a book value of P300,000 after four years of use without salvage value. The equipment should have been depreciated over a 10 year useful life.
Rivera, Sampson, and Elliott are partners in a commercial plumbing business. Rivera and Sampson have also started another contracting company and have cash flow needs, which require periodic distributions from the partnership. In order to deal fairly with the level of partnership withdrawals, the partnership agreement calls for profit sharing as follows:Component Rivera Sampson ElliottSalaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$80,000 $80,000 $100,000Bonus on income after the bonus . . . . . . . . . . .0% 0% 10%Interest on ‘‘average net capital’’ . . . . . . . . . . . 0% 10% 10%Percentage of remaining profits. . . . . . . . . . . . .0% 30% 40%‘‘Average net capital’’ is determined by netting the partners’ drawing accounts against their capital accounts and weighting the net amounts for the appropriate portion of…
If A is the total capital of the partnership before the admission of a new partner, B is the total capital of the partnership after the investment of a new partner, C is the amount of the new partner’s investment, and D is the amount of capital credit to the new partner, then there isa) A bonus to the old partner if B = A + C and D=C.b) A bonus to the new partner if B = A + C and D=C.c) A bonus to the old partner if B = A + C and D>C.d) A bonus to the new partner if B = A + C and D>C.
What is the journal entry to record the formation of the partnership? Charlie and Brown form a partnership and invest the following assets and liabilities Fair Market Value Carrying Value Mary Cash $ 50,000 $50,000 Land 70,000 40,000 Dawn Cash 16,000 16,000 Building 100,000 90,000 Mortgage Payable (60,000) (60,000) Assuming that the partners will share income and losses equally, prepare the entry to record the formation of the partnership.
Xales and Yolanda have original investments of $45,500 and $110,000, respectively, in a partnership. The articles of partnership include the following provisions regard division of net income: interest of onginal investment at 20%; salary allowances of $28,400 and $29,200, respectively, and the remainder to be divided equally. How much net income of $109,700 is allocated to Yolanda? a. $51,200 b. $61,700 c. $22,000 d. $78,040
A and B are in partnership sharing profits and losses in the ratio 3:2 respectively. Profit for the year was $86,500. The partners' capital and current account balances at the beginning of the year were as follows: A B $ Current accounts 5,750CR 1,200CR Capital accounts 10,000CR 8,000CR A's drawings during the year were $4,300, and B's were $2,430. What should A's current account balance be at the end of the year? $51,900 B 57,650 $53,350 D $61,950

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